1/
2013
Year-end Highlights
Content
General Evaluation of 2013
2013 Year-End Consolidated Financial Statements
2014 Projections
Detailed Information by Operating Segments
2
General Evaluation of 2013
2013 Year-End Consolidated Financial Statements
2014 Projections
Detailed Information by Operating Segments
3
Several factors emerged in 2013, that affected the developments in the Turkish economics and
the financial markets negatively. The indications that the period of monetary expansion, which
started following the 2008 crisis particularly in the US and which had encouraged foreign
capital to flow into developing countries like Turkey, may soon fade out; political difficulties
and unrest particularly in Turkey’s southern neighbors; and the political tension experienced for
various reasons throughout the year in Turkey are among those factors.
2013 has been a year in which economic growth rate was slower than that was desired, exports
declined (albeit small), current account deficit widened, and unemployment rose in Turkey.
Furthermore, annual inflation rate climbed up, both respect to the previous year and in excess
of the official target. There was major volatility in financial markets, particularly in the summer
and towards the year-end, and the Turkish lira declined to its lowest value ever against the US
Dollar and the Euro.
Within the framework of this macro situation Tekfen Group’s 2013 financial performance fell
short of its targets in 2013. In 2013, Tekfen Group’s revenues were TRY3,846 million; earnings
before interest, taxes, depreciation and amortization (EBITDA) were TRY10 million, and the
Group registered a net loss of TRY64 million. At the end of 2013, Tekfen Group had assets of
TRY4,697 million and equity capital of TRY1,942 million.
4
General Evaluation of 2013
Tekfen Contracting Group, which constitutes one of Tekfen Group’s two main business areas, had a revenue of
TRY2,327 million, roughly akin to that of the year before. Nevertheless, the Contracting Group had net losses of
TRY217 million due to unexpected cost increases in projects especially in Morocco and Turkmenistan. In contrast,
the Contracting Group undertook new work valued at approximately US$2.2 billion in 2013. As a consequence, the
Group’s backlog, which was US$2 billion at the end of 2011 and US$2.2 billion at the end of 2012, reached US$3
billion at the end of 2013. Given the newly acquired work and our expectations regarding the favorable evaluation
of the claims we presented to the clients of our projects at loss, the Group is optimistic about the upcoming period
and it aims for a better year in 2014, especially in terms of profitability.
Tekfen Agri-industry Group, which accounts for Tekfen’s other major business area, had a successful year in
2013 with revenues of TRY1,423 million and net profit of TRY63 million. It is noteworthy that the Agri-industry
Group achieved significant profit despite rising raw material costs largely created by the increase in foreign
exchange rates. Significantly, given the unfavorable macroeconomic situation, the Agri-industry Group made
progress in 2013 on its major investment, decided the previous year, at Toros Tarım’s Samsun Plant. This circa
US$300 million-investment, scheduled for completion by the end of 2014, will ensure raw material supply and
reduce production costs.
The Real Estate Development Group concentrated on two major projects in 2013. The first was the Istanbul
Esenyurt Project, a large-scale housing project for which preliminary construction began in December 2013. The
second was the Izmir Mixed-Use Project (housing-office-commercial), a joint venture with Rönesans Group,
whereby construction works are scheduled to start in 2014. As both projects are in their initial stages, there is no
major revenue or profitability for the Real Estate Development Group to report in 2013. Indeed, the Group
announced revenues of TRY30 million and a net loss of TRY1 million in 2013.
Tekfen Group aims to significantly improve its performance in 2014, particularly with regards to profitability.
5
General Evaluation of 2013 -2
General Evaluation of 2013
2013 Year-End Consolidated Financial Statements
2014 Projections
Detailed Information by Operating Segments
6
Basic Balance Sheet Items (Million TRY) 31 Dec 12 31 Dec 13 Change (%)
Total Assets 4.130 4.697 14▲
Shareholders' Equity 2.111 1.922 9▼
Basic Income Statement Items (Million TRY)
01 Jan 12 -
31 Dec 12
01 Jan 13 -
31 Dec 13 Change (%)
Revenues 3.949 3.846 3▼
Gross Profit 385 127 67▼
Operating Profit 200 -124 162▼
EBITDA 281 10 97▼
Net Profit 300* -64 121▼
7
Main Financial Indicators
* The impact of the TRY 129 million profit from the sale of our shares in Eurobank Tekfen is included in the 2012 net profit figure.
Revenues
8
Consolidated (Million TRY) By Segment (Million TRY)
By Segment (%)
Contracting Agri Industry Real Estate Other
2.395
1.424
61 68
2.327
1.423
30 67
2012 2013
2012 2013
3.949 3.846
60,7%
36,1%
1,5% 1,7%
2012
60,5% 37,0%
0,8% 1,7%
2013
EBITDA
9
Consolidated (Million TRY) By Segment (Million TRY)
Contracting Agri Industry Real Estate Other
142 137
0 2
-100
117
0
-8
2012 2013
2012 2013
281
10
EBITDA Margin (%)
10
Consolidated (%) By Segment (%)
Contracting Agri Industry Real Estate Other
5,9
9,7
-0,5
2,5
-4,3
8,3
-0,8
-11,9
2012 2013
2012 2013
7,1
0,3
Net Profit
11
Consolidated (Million TRY) By Segment (Million TRY)
Contracting Agri Industry Real Estate Other
24
116
2
159
-217
63
-1
92
2012 2013
* The impact of TRY 129 million profit from the sale of our shares in Eurobank Tekfen is included.
2012 2013
300
-64
*
Net Profit Margin (%)
12
Consolidated (%) By Segment (%)
Contracting Agri Industry Real Estate Other
1,0 8,1 3,0
232,7
-9,3
4,4
-2,5
137,2
2012 2013
2012 2013
7,6
-1,7
2009 2010 2011 2012 2013
Other
Agri Industry
Real Estate
Contracting
15.514
Number of Employees
13
Number of Employees
Contracting Real-Estate Agri-Industry Other* Total
2009 8.877 745 949 795 11.366
2010 10.680 569 993 837 13.079
2011 12.982 710 995 822 15.509
2012 15.546 419 1.035 532 17.532
2013 13.614 348 1.033 519 15.514
* Eurobank Tekfen personnel is included in Other segment in proportion to Tekfen Holding’s share in the related company for 2008-2011 period .
13.079 11.366
15.509 17.532
Capital Expenditures
14
Capital Expenditures (Million TRY)
Contracting Real-Estate Agri-Industry Other Total
2008 88,5 15,8 17,3 11,8 133,4
2009 26,5 0,7 15,3 0,8 43,3
2010 30,0 0,2 10,2 13,5 53,9
2011 78,4 0,3 11,4 6,4 96,5
2012 142,6 0,3 49,9 0,4 193,3
2013 24,7 0,4 158,4 0,6 184,1
Million TRY
2008 2009 2010 2011 2012 2013
Other
Agri Industry
Real Estate
Contracting
133,4
96,5
43,3 53,9
193,3 184,1
Net Cash Position*
15
Consolidated Net Cash Position (Million TRY) Net Cash Position by Segments (Million TRY)
Contracting Agri-Industry Real-Estate Other
-290
147 11
767
-619
224
-99
688 2012 2013
* Net of financial liabilities, cash and cash equivalents.
2012 2013
635
193
General Evaluation of 2013
2013 Year-End Consolidated Financial Statements
2014 Projections
Detailed Information by Operating Segments
16
Total Revenues
17
Million TRY
* Projected
3.949 3.846 3.991
2012 2013 2014/P*
Revenues (Million TRY)
18
* Projected
Contracting Agri Industry
Real Estate Other
2012 2013 2014/P*
2.395 2.327 2.445
2012 2013 2014/P*
1.424 1.423 1.408
2012 2013 2014/P*
61
30 54
2012 2013 2014/P*
68 67 84
EBITDA
19
Million TRY
* Projected
281
10
272
2012 2013 2014/P*
EBITDA (Million TRY)
20
Contracting Agri Industry
Real Estate Other
* Projected
2012 2013 2014/P*
142
-100
167
2012 2013 2014/P*
137 117 111
2012 2013 2014/P*
0 0
-7
2012 2013 2014/P*
2
-8
1
EBITDA Margin (%)
21
* Projected
7,1
0,3
6,8
2012 2013 2014/P*
EBITDA Margin (%)
22
Contracting Agri Industry
Real Estate Other
* Projected
2012 2013 2014/P*
5,9
-4,3
6,8
2012 2013 2014/P*
9,7 8,3 7,9
2012 2013 2014/P*
-0,5 -0,8
-13,0
2012 2013 2014/P*
2,5
-11,9
1,2
Net Profit
23
Million TRY
* Projected
** The impact of TRY 129 million profit from the sale of our shares in Eurobank Tekfen is included.
300
-64
151
2012 2013 2014/P*
**
Net Profit (Million TRY)
24
Contracting Agri Industry
Real Estate Other
2012 2013 2014/P*
24
-217
37
2012 2013 2014/P*
116
63 80
2012 2013 2014/P*
2
-1 -6
2012 2013 2014/P*
159
92
40
25
* Projected
Net Profit Margin (%)
7,6
-1,7
3,8
2012 2013 2014/P*
Net Profit Margin (%)
26
Contracting Agri Industry
Real Estate Other
* Projected
2012 2013 2014/P*
8,1
4,4 5,7
2012 2013 2014/P*
232,7
137,2
47,6
2012 2013 2014/P*
1,0
-9,3
1,5
2012 2013 2014/P*
3,0
-2,5
-11,1
General Evaluation of 2013
2013 Year-End Consolidated Financial Statements
2014 Projections
Detailed Information by Operating Segments
Contracting Group
27
Contracting Group The Middle East Region
The Middle East, with its oil and natural gas resources make it one of the largest markets for international construction
companies and for Tekfen, is also an arena of strong competition. Tekfen aims to strengthen its presence in the market
by submitting proposals for high-quality projects for which there is relatively low competition.
Tekfen Construction’s work on the Propylene Oxide Processing Unit, which began in 2012 for the Sadara Chemical
Company in Saudi Arabia, continued according to plan in 2013. The project is scheduled for completion at the
beginning of 2015. Efforts are underway to expand involvement in the project by securing a share of other facilities
planned for the complex.
Tekfen’s presence in Qatar has grown considerably in recent years. Both the North Road and the Ceremonial Road
projects were mostly completed and delivered in 2013. Work continued on the 95-km North Road Side Roads and
Additional Junctions Project, an ever expanding continuation of the same highway project. The project, which is
scheduled for completion at the end of 2015, is expected to reach nearly $800 million with additions.
The 92-km pipeline to transport degasified oil from the Shah, Asab and Sahil regions of Abu Dhabi, in the UAE, was
completed on 25 March 2013.
While security concerns have limited Tekfen’s volume of business in Iraq, the country will continue to hold a place in
the Company’s portfolio. Tekfen Construction is currently negotiating for various projects there. The contract for the
general project management and engineering services that Tekfen Construction, together with Tekfen Engineering,
began in 2010 for the BP, CNPC and SOC Consortium in the Rumaila oilfield in the Gulf of Basra continued in 2013.
These services are expected to grow as the Iraqi government makes investment decisions in 2014.
28
Developments in 2013 and
Potential Projects
Contracting Group Caspian Region
The Caspian Region, which has the third largest petroleum and natural gas reserves in the world, has a growing importance
in the global energy market and is one of Tekfen Construction’s major areas of operation.
Azerbaijan, one of the most important actors in this region, is Tekfen Construction’s regional center of operations. Tekfen
is closely monitoring the Shah Deniz Phase-2 project, which will increase the capacity of Azeri gas. In fact, in December
2013, Tekfen concluded a contract with BP Exploration (Shah Deniz) for two new offshore platforms weighing a total of
26,442 tons and a bridge to link them for the Shah Deniz Phase-2 project. Tekfen Construction, together with its
participation in Azfen, its local partner, has a share of about $496 million in the project, which is budgeted at close to $975
million.
On the other hand, Tekfen Construction, within the framework of the Tekfen-Azfen Consortium, concluded yet another
contract with BP Exploration for the construction and assembly of the Sangachal Land Terminal, which is similarly part of
the Shah Deniz Phase-2 Project. Tekfen Construction’s share of the nearly $1 billion budget is approximately $621
million.
Another project Tekfen launched in Azerbaijan in 2013 was the Baku Olympic Stadium with 68,000-spectator capacity.
Tekfen Construction is responsible for the construction and general project planning services of the project. The project
value of the venue was initially planned as $640 million and will be completed in a record 24 months.
Turkmenistan is another Caspian Region country where Tekfen Construction has operations. The mechanical component
of the Galkynysh Natural Gas Field Development Project, under construction for the major contractor Petrofac, was
completed on schedule on 31 May 2013. The project, launched in 2011, involves the cleaning and purification of raw
natural gas from wells in the vicinity of South Yoloten and the piping of useable gas to foreign markets. Given the project
management’s expressions of satisfaction with Tekfen, the Company expects to receive similar projects in the country,
whose importance for natural gas investments has grown.
29
Developments in 2013 and
Potential Projects
Contracting Group Turkey
For many years, Tekfen Construction’s operations have been heavily weighted towards projects abroad. However, an
increase in the number of new projects in Turkey in Tekfen’s field of specialization has contributed to a growth in
domestic operations since 2012.
An $501-million agreement for Tüpraş’s Residue Upgrading Project (RUP) was signed with the project’s principle
contractor, Técnicas Reunidas of Spain, at the end of 2011, and is progressing according to plan. Tekfen is responsible
for the construction and assembly of the RUP unit, the scheduled completion of which is September 2014.
Another domestic project for Tekfen Construction is the Samsun Production Plant of Toros Agri, where the project is
for a sulphuric acid facility, expansion of the production capacity of the two existing phosphoric acid facilities and the
renovation of the existing NPK facilities. This is an EPC-turnkey project and it is scheduled for completion at the end
of 2014 .
Tekfen Construction has been responsible for repairs and maintenance of the Turkish section of the Baku-Tbilisi-
Ceyhan Crude Oil Pipeline since 2009. Throughout 2013, the BTC Repairs Project received regular orders, which
were completed according to schedule. In addition, a three-year Repair Contract for the BTC Pipeline, for which a
tender was held, was signed in 2013. The project, which is expected to bring in $136 million, will be carried out, as
before, through gradual work orders issued by management.
Domestic oil, natural gas and energy investments expected in the near future promise to increase Tekfen’s
opportunities to expand further the number of projects it has in Turkey. The Star Refinery, being established by
SOCAR in Izmir Aliağa, presents significant business potential for Tekfen Construction. It is hoped that the
productive partnership Tekfen Construction has enjoyed at Tüpraş with Técnicas Reunidas, the leader of the
partnership that is going to build the Star Refinery, will carry forward to this project. Tekfen Construction is also
interested in the Trans-Anatolian Natural Gas Pipeline (TANAP) project, for which a memorandum of understanding
was signed at the end of 2011 followed by an intergovernmental agreement in June 2012. New business prospects for
Tekfen Construction are expected to be created in Azerbaijan and Georgia. The project is to take five years and cost
$7 billion.
30
Developments in 2013 and
Potential Projects
Contracting Group
North Africa
Tekfen Construction has done business in North Africa since 2004. However, as a region strongly affected
by the Arab Spring, stability there remains elusive. The Company is seeking restoration of its operations in
Libya, which came to a halt with the conflict that started at the beginning of 2011. Negotiations continued
with Libyan authorities to resume work on the Al Kufra-Tazerbo section of the Man Made River project,
which will transport ground water from the Sahara Desert through huge 4-meter diameter pipes to
residential areas on the Mediterranean coast. Hopes are rising that outstanding amounts and compensation
for damages will be paid and that partially completed projects will be finished.
Tekfen has carried out significant projects in Morocco. Among the most recent of these projects are the two
diammonium phosphate (DAP) fertilizer plants, each with an 850,000-ton annual capacity, which were
completed and delivered to the client on 31 May 2013. Construction of the pipeline to carry slurried
phosphate ore extracted from mines in the Khouribga region to Jorf Lasfar port on the Atlantic coast was
mostly completed. The goal is for the project to be mechanically completed by the end of 1Q2014.
31
Developments in 2013 and
Potential Projects
Contracting Group
32
Geography
Tekfen Contracting Group continued its operations in 8 countries in 2013, and has a backlog of USD 3 billion as of end of 2013.
This portfolio, concentrating mainly on three geographical regions, namely the Caspian Region, Middle East and North Africa,
includes, besides Turkey, Azerbaijan, Turkmenistan, Iraq, Saudi Arabia, Qatar, Morocco and Libya*.
The Group has 3 manufacturing plants in Derince, Ceyhan and Baku (Azerbaijan).
* As of the date of this presentation, the operations in Libya are frozen.
Contracting Group Backlog as of
December 31, 2013
33
* “Expected end date” refers to the mechanical completion date.
Project Location
Expected End
Dates *
Revenue
Based
Completion
Rate
Remaining
Amount (US$)
Çiftehan-Pozantı Motorway Turkey 15.10.2014 318.970.115 $ 225.352.386 $ 95,9% 9.277.222
Prov. of P/L Repair Services/Geohazard Works/Main Oil Line Works/BP Iraq Works Turkey 31.03.2014 102.061.732 $ 102.061.732 $ 98,5% 1.547.057
Prov. of Pipeline and Facilities Repair Services for BTC Turkey Turkey 10.09.2016 136.200.000 $ 136.200.000 $ 0,0% 136.200.000
Tüpraş - Residuum Upgrading Project of Izmit Refinery Turkey 09.09.2014 497.463.416 $ 497.463.416 $ 69,9% 149.684.562
Toros Tarım Samsun Plant Investment Project Turkey 31.12.2014 176.224.332 $ 176.224.332 $ 21,8% 137.765.254
Supply and Fabrication of Steel Structure Type Pancakes Turkey 07.02.2014 13.267.742 $ 13.267.742 $ 0,0% 13.267.742
Supply and Fabrication of Pancakes of Top Sides Modules Turkey 08.12.2014 26.302.112 $ 26.302.112 $ 0,0% 26.302.112
TURKEY TOTAL 474.043.949
South Yoloten Gas Field Project Package 2&3A Turkmenistan 31.12.2013 315.493.170 $ 315.493.170 $ 89,1% 34.404.721
TURKMENISTAN TOTAL 34.404.721
New Management Office Project of SOCAR Azerbaijan 30.09.2014 348.145.408 $ 348.145.408 $ 66,1% 118.051.105
Fabrication of Topsides & Drilling Facilities and Integration of Living Quarters Azerbaijan 20.04.2014 206.799.725 $ 206.799.725 $ 98,6% 2.846.167
Baku Olympic Stadium Project Azerbaijan 28.02.2015 717.792.893 $ 717.792.893 $ 44,8% 396.318.251
Shah Deniz Stage 2 Fabrication of Offsite Facilities Azerbaijan 31.12.2017 262.365.978 $ 262.365.978 $ 0,0% 262.365.978
Shah Deniz Stage 2 Onshore Terminal Facility - Sangachal Terminal Azerbaijan 15.10.2017 369.395.209 $ 369.395.209 $ 0,0% 369.395.209
AZFEN Projects Azerbaijan 1.761.574.939 $ 704.629.976 $ 27,7% 509.108.606
AZERBAIJAN TOTAL 1.658.085.316
Propylene Oxide Process Unit S. Arabia 05.01.2015 149.826.676 $ 149.826.676 $ 29,6% 105.416.366
SAUDI ARABIA TOTAL 105.416.366
OCP Slurry Pipeline Project Khouribga - Jorf Lasfar Morocco 01.04.2014 433.867.013 $ 433.867.013 $ 90,6% 40.701.625
MOROCCO TOTAL 40.701.625
Qatar Primary Routes North Roads Contracts 2&3 Qatar 30.09.2013 792.756.364 $ 792.756.364 $ 96,4% 28.724.060
Additional Work for North Road Project Qatar 25.02.2014 95.991.781 $ 95.991.781 $ 78,9% 20.269.877
QAPCO LDPE 3 Project Low Density Polyethylene Plant Qatar 30.06.2012 166.348.917 $ 166.348.917 $ 98,2% 3.067.922
Design and Construct Service Road Enhancement to North Road Corridor Qatar 25.06.2016 592.030.028 $ 592.030.028 $ 15,6% 499.758.064
QATAR TOTAL 551.819.923
Kufra Conveyance System Libya On Hold 486.461.084 $ 325.928.926 $ 70,0% 97.898.859
LIBYA TOTAL 97.898.859
Rumalia Field Dev. Project Prov. Of Engineering and Project Management Services Iraq 30.06.2014 213.130.573 $ 213.130.573 $ 83,1% 35.917.805
IRAQ TOTAL 35.917.805
TOTAL 2.998.288.564
Current
Contract Price
Tekfen
Portion
Contracting Group Growth
34
Considering the new projects undertaken and those completed in 2013, the backlog of the Group
amounts to USD 3 billion as of end of 2013, registering a 40% increase with respect to the
previous year-end.
As of 31 December 2013, backlog abroad constitutes 84% of the total.
Backlog (USD million)
0
500
1.000
1.500
2.000
2.500
3.000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
569 484 484 368 237 159 111 72 75 34 36
555 561 476
175 201 242 167 264
1.535 1.350
1.668 1.257 1.225
1.794
1.449 1.589
2.522
Abroad Turkey
744 685
726 535
501
1.694
1.461
1.740
1.333 1.259
1.830 2.005
2.150
2.998
Contracting Group Ongoing Projects
Backlog Breakdown by Regions Backlog by Project Types
35
Region Million USD
Caspian Region 1.692
Middle East 693
Turkey 476
North Africa 139
Total 2.998
Project Type Million USD
Industrial Facilities 1.610
Motorway 558
Buildings 514
Pipeline 276
Fabrication Works 40
Total 2.998
Pipeline
9%
Industrial
Facilities
54%
Motorway
19%
Fabrication
Works
1%
Buildings
17%
Middle
East
23% North
Africa
5%
Caspian
Region
56%
Turkey
16%
Contracting Group
36
Revenues (MTRY) and EBITDA Margin (%)
Revenues &
EBITDA Margin
The EBITDA margin which was at
5,9% level by the end of 2012, came
down to -4,3% in 2013-end.
At the inital phase of each project,
expected project-end EBITDA margin,
varies from 10% to 25% on project
basis.
Tax rates that the Group is exposed to
in the countries it operates vary between
0-35%.
In 2013, EBITDA amounted to negative TRY 100 million, leading to an EBITDA Margin of -4.3%. As a result, a
net loss of TRY 217 million was registered. This loss stemmed mainly from the ongoing pipeline projects in Morocco
and Turkmenistan. The factors behind this loss were unexpected variation orders in 2013 and additional costs that
were born due to these amendments, as well as increase in labor costs and general expenses due to time extensions.
The total negative impact of these factors add up to TRY 234 million.
545 534
1.073 1.031
1.319 1.341
1.111
1.864
2.395 2.327 2.445
5,1%
12,7%
12,0%
7,3%
8,5% 11,2%
13,2%
9,3%
5,9%
-4,3%
6,8%
-5%
0%
5%
10%
15%
-500
0
500
1.000
1.500
2.000
2.500
3.000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014P
Revenue Margin
General Evaluation of 2013
2013 Year-End Consolidated Financial Statements
2014 Projections
Detailed Information by Operating Segments
Agri - Industry Group
37
FERTILIZERS
Global Developments
Fertilizer prices had decreased throughout the year. Urea, ammonium nitrate and ammonium sulphate prices
started to pick-up in December.
Reasons for downward trend in prices were increase in China’s supply, decrease in India’s demand and the
break-up of Belarus Potash Company (BPC).
Developments in Turkey
Domestic consumption increased by 9% and reached 5.8 million tons in 2013. With the impact of
significant early sales in November-December for Spring application of 2014, consumption numbers were
higher than normal levels.
Precipitation was lower than normal levels towards the end of 2013 and also at the beginning of 2014. This
can have a negative impact on 2013/2014 season.
38
38
Agri-Industry Group Developments
Domestic Sales
Volume and Market Share Toros Agri
39
4th Quarter Cumulative
Quarterly sales were higher than 2012 due to increase in early sales for 2014 spring season.
Yearly sales volume in 2013 stayed flat compared to 2012.
In both periods, market share decreased because increase in consumption was higher than the increase in sales
volume.
376 418
10 14
33%
28%
0%
5%
10%
15%
20%
25%
30%
35%
0
100
200
300
400
500
600
700
2012/Q4 2013/Q4
1,0
00 T
ons
Dealer Sales Wholesale Market share
432 386
1.542 1.524
70 91
30% 28%
0%
5%
10%
15%
20%
25%
30%
35%
0
500
1.000
1.500
2.000
2.500
2012 2013
1,0
00 T
ons
Dealer Sales Wholesale Market share
1.615 1.612
Domestic Sales by Product Toros Agri
40
Cumulative (1,000 Tons)
338 347
54 65
139
666
3
286 336
55 106
154
673
5
2012 2013
4th Quarter (1,000 Tons)
48 43
5 13
50
226
1
51 54
8 24
55
239
1
2012/Q4 2013/Q4
Due to unfavorable pricing dynamics, AN33 imports were inadequate in the first half of the year; therefore, AN26
and AN33 sales volume decreased compared to 2012 .
Toros Agri
41
Domestic Sales Prices
4th Quarter (USD/ton)
AN26 AN33 AS UREA DAP COMP
315 364
292
496
616
459
295 344
219
413
486
373
2012/Q4 Ave. 2013/Q4 Ave.
Cumulative (USD/ton)
AN26 AN33 AS UREA DAP COMP
325
381
282
524
623
469
342 382
276
464
530
416
2012 Ave. 2013 Ave.
2012/Q4 2013/Q4 difference 2012 2013 difference
AVERAGE PRICE (USD$/TON) 450 374 -17% 429 405 -6%
Production Toros Agri
42
4th Quarter (1,000 tons) Cumulative (1,000 tons)
AN26 production volume decreased because AN33 was produced instead of AN26, in parallel with demand in
the market.
Compound fertilizer production in 2013/Q4 decreased compared to 2012/Q4 due to downward trend in
compound fertilizer sales and our policy to keep minimum inventory.
81 78
30
148
337
64
100
27
109
300
AN 26 AN 33 DAP COMP Total
Production
2012/Q4 2013/Q4
306 297
156
664
1.423
265 328
159
656
1.408
AN 26 AN 33 DAP COMP Total
Production
2012 2013
Toros Agri
Capacity Utilization
43
PRODUCT
TYPE PLANT
CAPACITY
(1,000
Tons/year)
CAPACITY UTILIZATION RATE (%)
2012/Q4 2013/Q4 2012 2013
AN26 MERSIN 660 98 103 104 103
NPK CEYHAN 660 81 53 80 79
NPK/DAP SAMSUN 527 41 45 62 63
TOTAL* 1.847 77 70 83 83
* Weighted average CUR
Imports Toros Agri
44
3rd Quarter (1,000 tons) Cumulative (1,000 tons)
Imports increased in parallel with higher demand.
0 4
35
2
41
17 15
27
0
59
AN33 AS UREA Other Total
Imports
2012/Q4 2013/Q4
19
62
87
3
171
28
63
95
3
189
AN33 AS UREA Other Total
Imports
2012 2013
Agri-Industry Group TERMINAL SERVICES
45
45
Handled Quantity and
Leased Capacity
Leased Capacity (1,000 m 3)
Petroleum Products
384
1.076
2012 2013
Handled Quantity (1,000 tons)
Dry/Liquid Bulk-General Cargo*
5.359
4.480
2012 2013
* Does not include petroleum products’ handling volume.
Decrease in Dry/Liquid Bulk-General Cargo handling quantity was higher than expected.
Uncertainty in coal sector due to developments in USD/TRY exchange rate decreased import
volume of coal firms located in Samsun.
In Ceyhan, export volumes of firms operating in minerals and ore sector were less than expected
which contributed to the decrease in dry bulk cargo handling quantity.
Improvement in occupancy rate in petroleum products were better than expected. Occupancy in
2013 was 40% compared to 14% in 2012.
Agri-Industry Group
46
46
Revenue EBITDA Net Profit
Revenue, EBITDA
& Net Profit
2012/Q4 2013/Q4
337 356
20 16
Mil
lion
TR
Y
Agri Terminal
2012/Q4 2013/Q4
23 21
8 6
Mil
lion
TR
Y
Agri Terminal
2012/Q4 2013/Q4
17
24
6
5
Mil
lion
TR
Y
Agri Terminal
357 372
31 27
23
29
Agri revenues increased due to higher fertilizer sales volume.
Downward trend in fertilizer prices continued in the last quarter and the balance between raw material prices and
sales price was unfavorable for fertilizer producers. Therefore, as expected, 2013/Q4 EBITDA was weaker than
2012/Q4.
Net income was realized higher than expectations due to positive tax effect of incentive received for Samsun Plant
investments.
Agri-Industry Group
47
47
Revenue EBITDA Net Profit
Revenue, EBITDA
& Net Profit
2012 2013
1.357 1.354
67 69
Mil
lio
n T
RY
Agri Terminal
1.424 1.423
2012 2013
110 87
27 30 M
illi
on
TR
Y
Agri Terminal
137 117
2012 2013
98
40
18
23
Mil
lio
n T
RY
Agri Terminal
116
63
Downward trend in fertilizer prices continued throughout the year and the balance between raw material prices
and sales price was unfavorable for fertilizer producers. Therefore, as expected full year EBITDA was weaker than
2012.
Net income was negatively affected by TRY depreciation against USD.
2014 Expectations Toros Agri
48
Fertilizers
Domestic Sales Volume: 1.7 million tons
Market share: 31%
Average Domestic Sales Price: $355/ton
Capacity Utilization Rate: 85%
Terminal Services
Dry/Liquid Bulk-General Cargo handling volume: 4.65 million tons
Petroleum products occupancy rate: 41%
Agri-Industry Group
49
49
Revenue EBITDA Net Profit
Revenue, EBITDA,
Net Profit Projections
2013 2014P
1.354 1.333
69 75
Mil
lio
n T
RY
Agri Terminal
1.423 1.408
2013 2014P
87 80
30 31
Mil
lio
n T
RY
Agri Terminal
117 111
2013 2014P
40 59
23 21 M
illi
on
TR
Y
Agri Terminal
63 80
General Evaluation of 2013
2013 Year-End Consolidated Financial Statements
2014 Projections
Detailed Information by Operating Segments
Real Estate Development Group
50
51
Real Estate Development Group
Tekfen Real Estate Dev. Inv. and Trade Co., Inc
Business Line: Investment, Development, Project Management, Asset Management
Tekfen Tourism and Management Co., Inc
Business Line: Facility Management
Tekfen Real Estate Investment Co., Inc
Business Line: Investment, Development
Tek
fen
Rea
l E
sta
te D
evel
op
men
t G
rou
p*
Organization
* Tekfen Oz Real Estate Development Co., Inc. was sold in March 2013 together with all its assets.
52
Projects Real Estate Development Group
* Values indicate Tekfen share in total sales revenue.
Project
Project
Function Location
Start Date of
Poject
End Date of
Project
Estimated Project
Size
(Million USD)
Izmir Mixed Use Mixed Use Izmir Jan.13 Jun.17 254*
Esenyurt Project Residential Istanbul May.13 Jun.16 231
Total 485
BREAKDOWN BY FUNCTION (m²)
Project Residential
Sellable/
Leasable Area*
Office
Sellable/
Leasable Area*
Retail
Sellable/
Leasable Area*
Izmir Project 25.000 10.000 30.000
Esenyurt Project 170.000 - 3.000
Real Estate Development Group
53
Ongoing Projects
Izmir Mixed Use
Transaction Overview:
50%-50% partnership with Renaissance Group
The largest mixed use project in Izmir
Total Project Size : USD 508 million
Project Share : 50 %
Project Summary:
Total Sellable/Leasable area (GLA) :
Shopping Mall 30,000 m²; Home Office 10,000 m² and
Residential 25,000 m²
Estimated const. period: Q2/2014 – Q2/2017
Landmark project for the city of Izmir
Investment Rationale:
Location within the new planned CBD of Izmir
High accesibility and visibility through the main arteries
The re-approval of zoning plan of Izmir Project
region is completed. Design development and
engineering works are ongoing.
Real Estate Development
54
Ongoing Projects
Esenyurt Housing Project
Overview:
Being developed on 56.800 sqm land which is purchased on
May 2013
Construction permit granted on December 2013 for the
project including aproximately 1.400 residential and retail units
Project Size: 231 million USD
Tekfen Share: 100%
Project Summary :
Total Sellable Space:
Housing: 170.000 sqm, Retail: 3.000 sqm
Construction Period- Start: Q1/2014 Complete: Q2/2016
The project will maintain the vision and standards that have
made Tekfen one of the pioneers in the sector, with the creation
of living space that will bring along a particularly significant
difference.
Investment Rationale:
Esenyurt property is in a sought-after area because of its
developing transportation infrastructure, the city’s growth
dynamics, and its situation on the intersection between the E5
highway and TEM motorway
Esenyurt has great potential for the development having a
predominantly middle-class area which is tha target segmet.
Construction permit is granted on Dec 13. Design
development and construction is ongoing. Sales
will start on second half of 2014.
Real Estate Development Group
55
Tekfen Services Facility Management
Facility management of Tekfen Tower, Taksim
Residences, Tekfen Head Office Buildings, Levent
Office, Yalıkavak Tekfen Houses and S-Cafe are
directed and operated by Tekfen Tourism & Facility
Management Co., Inc. under the brand name of Tekfen
Services.
Facility Management for the ongoing and the
potential projects of Tekfen Real Estate Development
Group is planned to be operated by Tekfen Services.
Tekfen Services’ professional facility management
improves the values of the projects of Real Estate
Development Group.
Real Estate Development Group
56
Assets
Tekfen Holding earns rental income from the offices it owns in Akmerkez and
Tekfen Tower.
Tekfen Tower has 33,000 m² rentable area. Of this, 21% is used by Group
Companies, while the rest is rented to several institutions.
Total rental income from Tekfen Tower was USD 9.7 million in 2011, USD 10.6
million in 2012 and USD 11.4 million in 2013.
Disclaimer
57
Tekfen Holding A.S. (the “Company”) has prepared this presentation (the “Presentation”)
in order to provide investors with general information about the Company. The contents of
this Presentation is based on public information and on data provided by the Company
management. Neither the Company nor any of its directors, managers or employees nor
any other person shall have any liability whatsoever for any loss arising from use of this
presentation. This Presentation does not constitute an offer or invitation to purchase the
securities of the Company. Investors and prospective investors interested in the securities
of the Company are required to conduct their own independent investigations and
appraisal of the business, financial condition of the Company and the nature of its
securities. Except for the historical information contained herein, the statements made in
this Presentation with respect to the Company’s plans, strategies, beliefs and other
prospective matters are forward-looking statements that involve risk and uncertainty that
are not under the Company’s control which may cause actual results to differ materially
from those anticipated. Except where otherwise indicated, this Presentation speaks as of
the date hereof. We undertake no duty to update or revise any forward looking statements,
whether as a result of new information, future events or otherwise.
Contact Information
58
For General Questions and Requests for Reports:
Çağlar Gülveren, CFA Investor Relations and Corporate Governance Coordinator
e-mail: [email protected]
Tel: +90 212 359 3420
Contracting Group:
Fatih Bahçeci, Tekfen Construction Vice President - Projects Planning and Control
e-mail: [email protected]
Tel: +90 212 359 3583
Agri-Industry Group:
Canan Şenkut, Chief - Investor Relations
e-mail: [email protected]
Tel: +90 212 357 0193
Real-Estate Development Group:
Ayşe Turalı, Assistant General Manager
e-mail: [email protected]
Tel: +90 212 357 1010